EconomyEditor's PickNewsNew Zealand’s Fonterra to sell China dairy farms for $368 million to focus on home markets

1 year ago95 min
imageStock Markets37 minutes ago (Oct 04, 2020 08:20PM ET)

(C) Reuters. The Fonterra logo is seen near the Fonterra Te Rapa plant near Hamilton

(Reuters) – New Zealand’s Fonterra (NZ:FCG) (NZ:FSF) said on Monday it has agreed to sell its farms in China for a total of NZ$555 million ($367.97 million) as the dairy producer continues to focus on the domestic market and reduce debt.

The company unveiled plans last year to halt overseas expansion after being criticised by the more than 10,000 farmers who make up its cooperative for its foray into countries like China and value added consumer products that were weighing on its profits.

“For the last 18 months, we have been reviewing every part of the business to ensure our assets and investments meet the needs of the Co-op today,” Chief Executive Officer Miles Hurrell said.

“Selling the farms is in line with our decision to focus on our New Zealand farmers’ milk.”

After the sale, the company will also be able to better prioritise its efforts in the foodservice, consumer and ingredients business in China, its biggest market, it added.

China Youran Dairy Group will purchase two farming-hubs located in Ying and Yutian for NZ$513 million, while Beijing Sanyuan Venture Capital is set to acquire an 85% stake in the Hangu farm.

The dairy giant said it will use the cash proceeds from the deal to pay down debt further, which it has already managed to reduce by NZ$1 billion, as of September.

New Zealand’s Fonterra to sell China dairy farms for $368 million to focus on home markets

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *